Stocks little changed after home construction data

ALEX VEIGAAP Business Writer Published: June 17, 2014 12:15 PM

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Major stock indexes were mixed in morning trading Tuesday as investors considered new government data on home construction and consumer prices. Financial stocks such as Charles Schwab and E-Trade were among the big risers, while homebuilders slumped as the pace of home construction eased last month.

KEEPING SCORE: The Standard & Poor's 500 index slipped one point, or 0.1 percent, at 1,936 as of 11:14 a.m. Eastern Time. The Dow Jones industrial average fell 15 points, or 0.1 percent, to 16,765. The Nasdaq composite gained five points, or 0.1 percent, to 4,326.

HOUSING: The Commerce Department said homebuilders started work at an annual rate on 1.01 million homes in May. That was down 6.5 percent from 1.07 million in April. Home construction has struggled to gain much traction this year, limiting its ability to contribute as much to broader economic growth as it has in the past. Shares in most homebuilders were trading lower, with William Lyon Homes posting the biggest decline. The builder shed 47 cents, or 1.8 percent, to $25.96

PRICE HIKE: The Labor Department reported that U.S. consumer prices increased in May by the largest amount in more than a year, propelled by rising costs for food, gasoline and airline fares. Over the past 12 months, consumer prices are up 2.1 percent. Prices have risen at a modest pace near the Federal Reserve's 2 percent target.

ANALYST'S TAKE: The mixed news on the U.S. economy and lingering concern over the conflict in Iraq left investors with little to trade on, said Brad Sorensen, director of market and sector analysis at the Schwab Center for Financial Research. "There really isn't a lot of impetus to sell or buy. We're kind of drifting along."

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SECTOR FOCUS: Seven of the 10 sectors in the S&P 500 fell, led by utilities stocks. Among the biggest laggards were Boston Scientific, which slid 30 cents, or 2.4 percent, at $12.62, and HCP Inc., which shed 78 cents, or 1.9 percent, to $40.33.

FAVORED FINANCIALS: Several financial stocks were trading higher as the yield on the 10-year note increased. Among them was E-Trade Financial, which rose $1.07, or 5.2 percent, to $21.48. Charles Schwab rose $1.15, or 4.3 percent, to $27.

FED WATCH: The central bank meets Tuesday and Wednesday. Fed officials are widely expected to keep a key short-term rate near zero. Economists don't expect the Fed to begin increasing that rate for another year. The Fed will also update its economic forecasts. That could result in the Fed trimming its estimate of 2014 growth after the government said last month that the economy shrank in the first three months of the year.

IRAQ & OIL: The price of crude rose 7 cents to $106.96 a barrel. The U.S. said it was deploying a small group of troops to Iraq, helping to ease concerns that a conflict could disrupt exports from OPEC's No. 2 oil producer. Those concerns have been behind crude oil's nearly 4 percent rise this month.

BONDS: Government bond prices slipped, pushing Treasury yields up. The yield on the 10-year note rose to 2.64 percent from 2.60 late Monday.